Maggie Valley first in region to pursue food and beverage tax

Restaurant and bar patrons in Maggie Valley may see an extra tax on their bills to support tourism promotion and projects in town by this time next year.

Maggie Valley’s town board has unanimously approved applying to the state for the authority to levy a 1 percent food and beverage tax in restaurants within town limits. The tax would be used to promote tourism in Maggie Valley and tourism-related projects in town.

The venture is far from a done deal, however.

State legislators are not expected to vote on the measure until after February 2011. Even after that, the town board must hold a public hearing and another official vote.

Still, the idea has already garnered widespread attention and a divided response among restaurateurs in Maggie.

James Carver, long-time owner of Maggie Valley Restaurant, is a strong supporter of the tax. Carver says it’s no different than the 4 percent lodging tax charged by hotels and motels to fund the Haywood County Tourism Development Authority.

“I think it’s time that we step up and do the same thing that the hotels and motels did back in [1983],” said Carver. “It’s time for us to support it and get the benefit of it.”

Carver has so much faith in the tax that he believes the trend will catch on with other towns instantly, much like the lodging tax was adopted by one county after another in the region two decades ago.

“Once we do it, it will spread to other locations overnight,” Carver said.

While the lodging tax captures overnight tourists, a long-standing problem was capturing revenue from daytrippers and seasonal homeowners. A restaurant tax could be the answer to that problem, according to Alderman Scott Pauley.

“It’s an untapped side of the market that hasn’t been explored,” said Pauley, adding that the tax would create a level playing field between restaurants and hotels both catering to tourists.

But Cheryl Lamberth, owner of Bar-B-Que Shack, is not so sure another tax is the solution.

“We don’t need anything else to hit us,” said Lamberth. “I mean the winter was bad enough with the rockslide, the mudslide, and all the snow.”

With the rough economy, Lamberth said the 1 percent tax may cause locals to take their business elsewhere. “People are going to do it. They’re not going to think of how little it is,” said Lamberth.

While Lamberth agrees Maggie Valley needs additional promotion, charging the locals and tourists more money would probably be counterproductive.

But Alderman Colin Edwards is skeptical about the claim that a 1 percent tax will turn away customers from Maggie Valley in large droves.

“If I want to eat, I’m going to stop and eat,” said Edwards. “I ain’t going to spend more money to drive to another town, because it’s going to cost you a lot more in Waynesville or Canton or Asheville than it would to eat in Maggie.”

Edwards said most of the larger, well-established restaurants seem to be in favor of the tax while smaller restaurants seem to oppose it.

Mayor Roger McElroy said without enough public support, the town board would not pass the tax. If it is passed, however, revenue would be used to advertise Maggie as a tourist destination and possibly make improvements at the festival grounds, McElroy said.

Town Manager Tim Barth said revenue could also be used to fund the $6.3 million sports complex proposed at Jonathan Creek. The park could bring in major revenue from visitors during tournaments, but as of now, there’s no funding for it.

“We were trying to think of ways to maybe help in that regard,” said Barth.

Town leaders envision setting up a board, heavily represented by restaurant owners, to decide exactly where collections from the 1 percent restaurant tax will go.

Inspiration for the model comes from Hillsborough, N.C., which has levied a similar 1 percent tax for years.

Hillsborough Town Manager Eric Peterson had only high praise for the prepared food and beverage tax.

“It’s been extremely successful as far as being able to promote and run a lot of activities we couldn’t afford to do otherwise,” said Peterson. “If it works half as good for Maggie Valley as it does for Hillsborough, I think the community will be happy.”